Abney Associates Comments on Deutsche Telekom Buyout of Czech Unit.

Online, February 13, 2014 (Newswire.com) - As Deutsche Telekom Ag, the largest German provider continues to expand its assets and reach across the continent it is now reportedly seeking to buy out the remaining 40% of its Czech wireless unit which saw the German telecom initially offer services in the country in 1996. The Czech wireless unit had some 5.5 million customers and generated sales of 1.04 billion Euros in that year.

"Deutsche Telekom has been expanding rapidly of late from a very good position of strength, one that sees them providing coverage in one form or another throughout much of Europe. Last November they acquired Warsaw-based landline provider GTS Central Europe and offered to further increase their stake in Hellenic Telecommunications Organization SA by 10% last month, the buyout of their Czech unit's investors fits this agenda perfectly," said Peter Chong, Senior Analyst at Abney Associates.

The buyout of investors holding the outstanding 40% in the Czech wireless unit including Mid Europa Partners LLP is the second such change in ownership of telecoms in the republic following Spanish Telefonica SA's completion of a 2.5 billion-euro sale of its own Czech unit to PPF Group NV last month. The renewed European expansion drive is a continuation of policy begun by Deutsche's previous CEO, which had been slowed whilst the company sought a return to growth of their U.S business.

"The continuation of this strategy of pursuing Eastern European expansion isn't really much of a surprise, their CEO Timotheus Hoettges has only been in his position since the first of January and it makes no sense to replace strategies initiated by your predecessor if they are working as well as this one. Since the merger of their U.S unit with MetroPCS Communications Inc, they have had a lot more freedom to engage in an already well earning sector for them of which Eastern Europe is," added Peter Chong, Senior Analyst within the Market Research Team at Abney Associates.

Leaving aside their home country of Germany, Eastern Europe accounted for 22 percent of Deutsche Telekom's net revenue in the first nine months of 2013. The telecommunications company's shares have fallen 5.4% this year closing at 11.76 Euros on February 7 giving Deutsche Telekom a valuation of 52.3 billion Euros.

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